Jar of IOUs The CFPB has said its research indicates that medical debt is less predictive of a person’s ability to repay than other kinds of loans. (Photo: Shutterstock)

Medical debt can damage the credit ratings of even the most conscientious consumers. The nation’s three largest reporting firms are responding with sweeping changes to how they report medical debt in collections.

Equifax, Experian and TransUnion will remove nearly 70% of medical debt in collections accounts from credit reports, the Wall Street Journal reported. Beginning in July, the companies will remove medical debt that was paid after it was sent to collections. These debts can remain on a consumer’s credit report for up to seven years, even if they are paid off. New unpaid medical debts won’t get added to credit reports for a full year after being sent to collections.

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